EURUSD: correction to 1.1060 expected

On Friday the 8th of November, trading on the EURUSD pair closed at 1.1018. The drop, which started at the beginning of the European session, was mostly triggered by technical factors. It gathered pace on the back of increased demand for safe haven assets in response to mixed reports on the US-China trade deal.

The Chinese Ministry of Trade said on Thursday that Beijing and Washington had agreed to gradually cancel previously imposed tariffs, although they did not specify a timetable.

US President Donald Trump said that he doesn’t want to completely cancel the tariffs, and so he hasn’t yet made a decision about cancelling trade tariffs on Chinese goods. Traders are already accustomed to the fact that contradictory statements from Trump are to be expected. There are trading robots whose algorithms follow Trump’s Twitter account, which bring in big money.

Day’s news (GMT+3):

  • 12:30 UK: GDP (Q3), manufacturing production (Sep).
  • 15:00 UK: NIESR GDP estimate (Nov).

Current situation:

On Friday, we made a forecast for the next two trading days with a target of 1.1017 (135 degrees). The bears reached their target for the first day with the pair’s drop coming to an end at 1.1017.

Today, Veterans’ Day is being celebrated in the US. Many exchanges are closed, so with low liquidity on the market today, we could see the pair head north against Friday’s movements. At the time of writing, the euro is trading at 1.1026. Today’s forecast is looking back upwards with a target of 1.1060. There’s an intermediate resistance at 1.1037.

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